An extremist, not a fanatic

April 24, 2012

"Social cleansing" and network effects

What’s wrong with “social cleansing”? This is the question raised by the hostile reaction to Newham Council’s efforts to move housing benefit recipients to Stoke.

There’s something to be said for this. It helps market forces to do what they should do - signal value. Houses should be occupied by the people who value them the most. If the state is paying for occupancy willy-nilly, the result is inefficiently high rents in some areas. Refusing to pay such rents might help force them down; remember, housing benefit is at least in part a landlord’s benefit.

The argument against encouraging* HB recipients to move to Stoke rests upon the value of social capital. In moving from Newham to Stoke, ties with family and friends are weakened. But is this a good thing or a bad thing?

One might argue that it’s an intrinsically bad thing. But I’m not sure. Yes, some people suffer from being parted from supportive family, but others might benefit from having an excuse to make a new start or move away from domineering fathers or ex-partners who harass them.

And economics tells us it’s ambiguous too.

It’s a bad thing to the extent that social networks can help get people into work. The more friends and acquaintances you have who are in work, you more chance you have of hearing about job openings. If you have to move away to where you don‘t know anyone, you lose such chances.

However, this is only true if you have friends who are in work. If most of your friends are out of work. You might lose hope, reduce job search and so have less chance of getting a job.

There’s another potentially important effect - upon crime. It’s well-known by now that our decision to commit crime or not is strongly influenced by our peers - hence “gang culture.“ One might imagine, therefore, that removing people from a criminally-inclined peer group reduces the chances of them falling into crime. It does. But there’s a flipside to this. Peers also keep us honest; law-abiding peers, or admirable role models, can turn youngsters away from crime and towards education (pdf). Taking people away from their networks risks removing this positive influence, as well as the negative one.

If all this sounds ambiguous, that is precisely the point. Things such as crime, getting a job or pursuing education are examples of emergent behaviour. Whether people do them or not is sensitive to initial conditions - the precise structures of their social networks - small changes in which can have large, and unforeseeable, effects. This is one message of Mark Granovetter’s threshold model (pdf). And it is why riots are so hard to predict.

If there is an objection to “social cleansing”, it lies in this - that, in breaking HB claimants’ networks, it is a form of blind social engineering - of making changes which have potentially big but unforeseeable effects. I suspect that many people are relaxed about this, because they believe that the networks of HB claimants have bad effects rather than good. What worries me, though, is that this belief might owe more to class prejudice than to hard evidence.

* I want to avoid the issue of whether HB recipients will be “forced” to move to Stoke, as this is a standard left-vs.-right question of semantics.

Comments

One major effect of "encouraging" someone to move from Newham to Stoke is that you are "encouraging" them to move from a zone of relative economic opportunity (there are some jobs are only a tube/bus ride away) to a zone where unemployment is even higher and there are no jobs nearby.

So in essence you are taking away what little social capital they may have had in the first place.

I come from a different part of the North, but I've seen sink estates on smaller scales. There's no evidence that turning Stoke into a mega-sink-estate is going to do anything but destroy economic value, unless someone is prepared to put a lot of money in regenerating Stoke.

Hard to see that as a net win for the country. Big win for the developers gentrifying Newham, of course...

I shouldn't waste too much thought on the subject, as I'm assuming that the press will continue to highlight the hard luck stories and eventually the government will back down.

Personally I think it's a long time coming. How long can landlords get away with raising rents and we, the tax payers, make them rich. I think that this scheme was meant to result in lower rents in London, not the present chaos.

I think the problem with this comes in one of your premises (no pun intended..) - housing benefit claimants don't necessarily value any particular house less than someone who can afford it without HB. They just lack the means (money) to express how much they value it.

And I don't think it's right to say here that the state is allocating housing willy-nilly - people on housing benefit choose their own house (to whatever extent we all do) and thus express their preference.

I think it's right to criticise housing benefit though - clearly not having a price floor does inevitably drive rents up. But then, we have housing benefit for a reason, because we've collectively agreed that there's no need in a wealthy for society for someone to go without a home.

That principle seems, as the 'no price floor' problem illustrates, to be incompatible with market provision. We didn't have this problem with a largely centrally planned system - council housing.

PS the no price floor problem seems to happen everywhere - Pell grants an means tested scolarships in the US seem to drive up university tuition fees, hugely inflating costs for those still struggling to afford university but not eligible for the grants(as with housing here). Yet in Europe, where systems have either been centrally planned (free) or have price caps (the UK) this problem does not exist.

A low minimum wage, a failure to build council houses, and continued high demand for property in London will inevitably lead to more of the working poor having to rely on housing benefit.

It doesn't take a genius to see that, having now accepted the principle of a cap, councils will be "encouraged" to push the cap lower in real terms over the years, thus capturing more families in this trap.

The suggestion that the cap will "encourage" landlords to lower prices doesn't stand up to scrutiny. The lack of new builds and the generational impact of property hoarding mean that the private rental sector in London will continue to be robust. It isn't dependent on benefit claimants. Today's problem isn't Rachmanism and slums but new build buy-to-let.

The term "social cleansing" is causing some people offence, but it is an accurate description of what is going on. We are discriminating against a specific group on the basis of their perceived failure. Forget the Balkans, this is more akin to housing policy in Northern Ireland in the 50s and 60s.

The best bet for the people of Newham is to squat Boris's Island, if it ever appears.

You seem to forget that low paid workers also get HB. Ever higher rents from the abandonment of Council house building and sell offs combined with low pay will impoverish a growing number of people both those who work and those who do not. This policy and the former refusal to build and renovate to supply homes is driving down real incomes and producing poverty. In one of the richest countries in the world. How shameful. And what a poor set of priorities, tax cuts for the wealthy in the budget and poverty increasing housing and welfare cuts. Shameful. And so little opposition from the so called opposition! Why not tax some of the retained profits firms do not want to use for investment and build or renovate some houses ?

Housing Benfit distorts the housing market and as a result managing that distortion is an example of downgrading expectations. Housing as a 'human right' is now part of our political and social DNA and has ceased to be subject to normal economic constraints. The government is quite right to wish to correct this distortion but is running in the face of a position which began with 'Homes for Heroes' circa 1920. They have a political challenge which they have too little political capital to see through.

Chris Purnell above has got it spot on really. Housing has indeed become a "right" and there is no way to backtrack on this. Unfortunately, the number of "rights" (usually at the expense of taxpayers) has exploded, whilst "responsibility" has pretty much collapsed. And then we wonder why so many are on the dole?

I see tories, above do not believe in human rights; I am not surprised!

They have finally admitted they are the party of greed and injustice. We would not want people to have rights! never vote for these backward jerks!! You vote for the reversal of human progress when you do.

It occurred to me thinking about this a few hours ago that the last time British people were turned into refugees in their own country was in 1940/41. Then at least it was the work of a foreign enemy Mr. Adolf Hitler. Now it is our own countrymen who are happy to do it. May be Mr.Purnell is an admirer of the fuhrers opposition to human rights and values. Sounds right.

It is unfortunate that Voltaire is not around any more so we could send our refugees to his country estate at Ferney as he was well known for his providing refuge to those persecuted by religious fanaticss!

I see that not only was Jim Callahan better at running the economy than the Con Dems but Neville Chamberlain was too.

"Now here's another chart that everyone is tweeting, and which Paul Krugman has just posted. The UK recovery is now doing WORSE than the great depression." Sixteen quarters with no rebound.

Chamberlain also built not a few houses for heroes to live in; so he must be a bad fish in Mr. Purnells' eyes. May be we could try a voodo rite to raise Harold Wilson and callaghan from the dead and put THEM in charge of the economy?

Now that they don't need us to fight their wars or keep their empire or even fill their factories because they've gone to China or defend them from the Russians, we are no use to them.
Put them up north with the rest of the thieving scum, I don't want to see them near me when I get back from the tax haven.

In addition to the human issues (which are many), the Newham / Stoke story distills in a nutshell housing market failure in the UK and its link to regional economic policy. On the one hand you have the dysfunctional London market, which includes Newham (but affects every London borough) and is marked by a lack of supply of affordable homes. Then you have Stoke, which in recent years (including during the housing boom) saw a complete collapse in demand for homes (stories of homes passing hands for a few hundred quid in places like Stoke). This lack of demand in Stoke (and other places in the midlands and north) is contingent on a lack of jobs and prospects in these areas and an incentive for those who are able, to move out. It's symptomatic of the UK economy's skewered south east dominance.